Payroll Question

[Pixie]

At the end of April, ABC company had a balance of $37,910 in vacations benefits payable account. During May, employers earned an additional $2,790 in vacation benefits, but some employee used vacation days amounting to $2,050 of vacation benefits.. The $2,050 was charged to Wage Expense when it was paid in May. What adjusting entry would ABC company make at the end of May to bring the vacation benefits payable account up to date.
Here is the answer I have but not sure if it is correct.
Vacation Benefits Expense 38,650
Vacation Benefits Payable 38,650
Thanks in advance.

 

[Denis]

At the end of April, ABC company had a balance of $37,910 in vacations benefits payable account. During May, employers earned an additional $2,790 in vacation benefits, but some employee used vacation days amounting to $2,050 of vacation benefits.. The $2,050 was charged to Wage Expense when it was paid in May. What adjusting entry would ABC company make at the end of May to bring the vacation benefits payable account up to date.
Here is the answer I have but not sure if it is correct.
Vacation Benefits Expense 38,650
Vacation Benefits Payable 38,650
Thanks in advance.

Nope...the 37,910 will become your 38,650 AFTER the adjusting entry is made....kapish?

 

[Pixie]

Ah, I think I get it now, I would make the adjusting entry for $740 and that would bring it up to date. Thanks so much for answering my question. The chapter just gives a small section and does not go into it a great deal. Thanks.

 

[Denis]

Ah, I think I get it now, I would make the adjusting entry for $740 and that would bring it up to date. Thanks so much for answering my question. The chapter just gives a small section and does not go into it a great deal. Thanks.

Yes. But your 740 should be posted as 2790 DR and 2050 CR .....